Investors generally have a bias to stick with what they know, which is why the big four bank shares such as Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) are so popular.
If you stick to the most popular Australian shares then you're missing out on some great smaller companies like Challenger Ltd (ASX: CGF) and Class Ltd (ASX: CL1).
The large Australian companies are also heavily focused on domestic operations, which means you aren't getting much diversification from overseas either. However, you don't need to invest directly overseas to get geographical diversification, there are some great ASX listed companies that earn most of their revenue internationally.
If the Australian dollar continues dropping, now could be the perfect time to pick up some of these overseas focused shares:
Ansell Limited (ASX: ANN)
Ansell is a world leader in protective gloves and condoms. It has a truly global reach with a presence in every continent and every major economy.
Roughly 95% of its revenue comes from countries other than Australia, giving it strong overseas diversification.
Ansell is trading at 16.9x FY17's estimated earnings with a dividend yield of 2.49% and it's maintained or increased its dividend every year since 2004.
Sonic Healthcare Limited (ASX: SHL)
Sonic is one of Australia's largest healthcare businesses with a market capitalisation of $9.1 billion.
It has operations in several countries including Australia, New Zealand, USA, Germany and Switzerland, around 59% of its revenue is earned from overseas.
Sonic has a long tailwind with the aging population in Australia and the aforementioned countries, meaning its services will be needed more in the coming years.
It's trading at 19.4x FY17's estimated earnings with a partially franked dividend yield of 3.37%. Sonic has maintained or increased its dividend every year since 1994.
Amcor Limited (ASX: AMC)
Amcor is Australia's leading packaging business with a market capitalisation of $16.6 billion.
As global trade increases and the trend for more items to be packaged continues, Amcor will be a beneficiary.
Around 35% to 40% of Amcor's revenue is in US dollars and 25% to 30% of revenue is in Euros, the remaining revenue comes from a basket of different countries. It is truly a global company and it reports in US dollars, so you can benefit if the US dollar goes up.
Amcor is trading at 18.9x FY17's estimated earnings with a dividend yield of 3.85%.
MFF Capital Investments Ltd (ASX: MFF)
If investing in companies listed in Australia doesn't seem that exciting, you could always invest in a listed investment company (LIC) that invests overseas for you.
The Magellan Flagship Fund, run by Magellan Financial Group Ltd (ASX: MFG), has large investments in Visa, MasterCard, Bank of America and Wells Fargo, which are some of the fastest-growing large cap stocks at the moment. MFF Capital Investments has managed to grow its underlying portfolio well, which is why the share price is up 181% in five years.
It currently offers a grossed up dividend yield of 1.56%.
Foolish takeaway
Having a diverse portfolio with companies of different sizes, industry and geography is important.
The above four companies offer investors a good way to gain exposure to overseas economies. This could be particularly important if Australia's economy stagnates and overseas countries kick on from here.
